Comments on: The Situation of Credit Card Regulationhttps://thesituationist.wordpress.com/2009/09/28/the-situation-of-credit-card-regulation/
Fri, 27 Feb 2015 22:12:34 +0000hourly1http://wordpress.com/By: Anittah Patrickhttps://thesituationist.wordpress.com/2009/09/28/the-situation-of-credit-card-regulation/#comment-15620
Thu, 01 Oct 2009 17:45:39 +0000http://thesituationist.wordpress.com/?p=8581#comment-15620Me wonders if moral hazard is also at play whenever someone takes a credit card out of their wallet, given that the person who is making the purchase (self at t=now) is not the same person that’ll pay for the purchase (self at t=future).

I spent half of my career marketing credit card and can assure you that even credit card marketing executives do not understand the intricacies of the very products that they hawk.

I’ve always liked the idea of a borrower’s license that you’d have to have in order to get a credit card.

But then, that doesn’t address the root cause: that people want to buy stuff they can’t sustainably afford.

]]>By: Tamara Pietyhttps://thesituationist.wordpress.com/2009/09/28/the-situation-of-credit-card-regulation/#comment-15602
Mon, 28 Sep 2009 23:45:20 +0000http://thesituationist.wordpress.com/?p=8581#comment-15602Great post Adam. I would go further and say not only should such agreements be written in clear and easy to understand language, but that many of the credit card issuers’ marketing practices should be restrained as well. For example, “convenience checks” usually carry high fees and are particularly likely to be used by consumers who are experiencing financial hardship. And although the average user can perhaps simply throw them away, the checks themselves expose the customer to risk of identity theft. When you consider that many people receive several of these solicitations a month (or even a week), that is a lot of paper which must be shredded or run the risk that it be misused. That seems environmentally unsound as well as likely to encourage habits with respect to the use of credit that might be problematic both personally and at the macro level. Increasing customer credit lines, in the absence of a customer request for an increase, merely to increase the amount of spending seems to offer similar problems. Punishing customers who actually use the credit they have been given with higher rates or fees, even though the limits may have been set unreasonably high by the issuer, seems unfair. There are myriad business and marketing practices that are very, very troubling. One would think that reforming the law to require more transparency in the “agreements” themselves would be a relatively minor and unobjectionable request. It is a measure of these companies’ ability, to date, to control much of the debate and the legislative response that such proposals are viewed by some as radical reform. To the contrary it seems only fair, not to mention desirable on the grounds of consistency and efficiency.
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